LOS ANGELES Precision Castparts Corp. (PCC) has raised its potential common stock buybacks by $750 million but said it wont hobble its aggressive acquisition program.
The Portland, Ore.-based producer of aerospace and industrial products said its board of directors authorized share repurchases through June 2015 representing 2.4 percent of its outstanding shares, in addition to approximately $400 million remaining from a previous authorization. The repurchase authorization doesnt obligate PCC to buy any particular amount of shares.
The primary purpose of the increased authorization is "to offset dilution from employee compensation plans," PCC said.
Chairman and chief executive officer Mark Donegan said in a statement that the expanded repurchase authorization was "firmly supported" by the companys growth and cash-flow expectations, and the company would continue to "aggressively pursue synergistic acquisitions as the primary use of our cash flow."
PCC, which purchased Titanium Metals Corp. in December 2012 and intends to spend $600 million for France-based fittings manufacturer Permaswage SAS, is considered one of the aerospace supply chains most active acquirers.
Birmingham, Ala.-based investment firm Sterne Agee Group Inc. supported the expanded stock buyback. Analysts Peter Arment and Josh W. Sullivan said in a note that the authorization "sends the right message for shareholders given the pullback in the stock," which they said had declined 8 percent since the current quarter began.